HSBC wants me to start paying off interest-free overdraft

Typically overdrafts are payable on demand. They could withdraw the facility I expect and require you to clear it. Is the ISA with HSBC as well?

They offer the interest free overdraft on the basis that you'll be using the account as your main current account. Not specifically that you'll have you student loan in it, but that it'll be in use.

Essentially if all youve done is withdrawn the limit and put it in (esp another bank/bs) ISA then the account isnt having any use and its starting its way along the dormant account process.

Not wanting to be overdramatic but at the end of the dormant account process they will write the debt off to a debt collection agency and place it with the Credit Reference Agencies, so i'd try to take the calls if i were you...

AFAIK if theyve asked and youve agreed to pay installments, and then you stop (not sure how many times you can do that) if they then ask for the whole sum that is then getting fairly close to the end of the process.

Hopefully you dont have another student account elsewhere? that could get messy as you agreed to only have one when you opened the HSBC one.

(I'm assuming that you're still a student, and that they're not reducing the limit after graduation?)

Ian

Usually the overdraft/account conditions include paying in a regular ammount, or as a student paying in loans/grants. If you havn't done this they can with draw the facility.

If you ignore it, well, overdraft facilities are usually repayable on demand, at anytime, so they would withdraw it and tell you to repay it. If you don't they would probably CCJ you or if it was enough money bankrupt you.

What date they said it was upto is pretty much irrelevant, they can take it off you at any time, read the conditions.

I assume this is a student account with the interest-free overdraft facility. A friend of mine had exactly the same occur to them. They opened the HSBC account as it offered a 5yr YP Railcard for free. After it was opened the overdraft of c. 1500 was put into a savings account and the interest spent partying - why not !?

A letter appeared on the doorstep asking that an amount was frequently paid into the account. This has since ceased with the student loan being paid into this account (about 1000 every 3-4 months) and then immediately being put into a current account with Halifax, a more frequently used account by the friend.

I think it is bad news that HSBC do this. My student account is with NatWest and not once have I had problems with it. Every year I ring them up to increase my overdraft (1st year50, 2nd year00, 3rd year00) and it is done the next working day. This goes straight into an ING savings account and accrues interest. The overdraft is interest-free for 3yrs after I graduate; free money is wonderful.

Joe

What you want to do is set up a direct debit to the account for say £100 a month (or less). Then use the money in the HSBC account for your regular purchases until its reached the limit each month.

In message , snipped-for-privacy@gmail.com writes

It would have to be a standing order, not a direct debit.

"halfanorange" wrote in news: snipped-for-privacy@g49g2000cwa.googlegroups.com:

Why run the risk of estabishing a poor credit history over such a trivial amount?

Martin.

In message , Joe Hunt writes

I'm pretty sure they'd have to write me a letter saying my overdraft is removed giving me a date that I have to pay it off before it's considered a debt.

No, I use another bank account with decent interest rates as my main account but it's not a student account.

It's a graduate account, it's interest free for three years I believe but the interest free rate reduces by £500 each year.

An overdraft is a debt, repayable on demand.

In message , s snipped-for-privacy@yahoo.com writes

True, however banking practice is now that the 'facility letter' should indicate the period for which the limit will likely apply and when it will be reviewed.

It goes quite far in studentdom, but I am sure you get my point. In fact, in the first year I put it all into Premium Bonds. I won 50 after three months, immediately withdrew it and put it into savings so I actually earned far more than 75 on it.

In my day there were people who withdrew the money and stuck it in a savings account (pre ISAs). I didn't like to do that in case they got arsey with me for playing the system.

It seems you have more bottle than I did.

Essentially there is no law that says banks must provide students with student accounts and interest free overdrafts. It's just a gimmick they provide to get you to open your account there and hopefully keep it there.

It works. Many of my friends bank with HSBC New St branch, even though they left Birmingham and the university over a decade ago.

Some people have an obsession over making a few pounds for nothing.

I don't think there's any risk of getting a poor credit history (apart from anything internal) as I'm within an agreed overdraft limit and I haven't agreed to pay a minimum amount back like I would with a credit card. Only if my bank withdrew my overdraft and I didn't make payments could I get a poor credit history, in which case I would pay straight away anyway.

I think I should earn at least a couple of hundred, all that just for transferring some money between two accounts, hardly a few pounds for nothing.

You've forgotten about the letters and phone calls and other hassle. What's the calculation for the couple of hundred? what period of time is it over?